Standard Chartered is looking into ways to fund a $262m package to bail out President Mugabe.

Standard Chartered Bank is considering the financing of a $262m (£206m) package to bail out President Robert Mugabe's cash-strapped government.

Bretton Woods institutions − including the World Bank (WB), the International Monetary Fund (IMF) and African Development Bank (ADB) − suspended their financial assistance to Zimbabwe in 1999 when the nation defaulted, and rendered it unable to clear a $1.8bn (then £1.36bn) debt it owes the institutions.

Zimbabwean street vendors protest against plans to bar them from the capital's streets on June 24, 2015 in Harare, ZimbabweJEKESAI NJIKIZANA/AFP/Getty Images

In 2014, the IMF stated the government needed to pay off its arrears and restore confidence by implementing economic reforms, social development and poverty eradication programmes if it was to be awarded financial assistance to aid its struggling economy.

It has now emerged that London-listed Standard Chartered, which is emerging markets focussed and a constituent of the FTSE 100 Index, has agreed to look at ways to help raise funding to clear these arrears – and allow Harare to secure $2bn in fresh funding.

The IMF's executive board said it will only release its financial chokehold once Zimbabwe pays off arrears to the ADB, $1.1bn to the WB, and $240m to the European Investment Bank (EIB).

"The African Development Bank and African Export-Import Bank (Afreximbank) asked us to look at a potential financing arrangement enabling economic development funds to be released to the Reserve Bank of Zimbabwe," a spokesperson for Standard Chartered said in a statement sent to IBTimes UK.

Afreximbank is expected to pay the reminder under a refinancing scheme to clear part of the the government's debt to ADB. It is understood that Harare will finance $82m on its own.

"Nothing has been agreed and we will not proceed without the full support of the UK government, among others, and the substantial reforms they require," the bank's spokesperson said in the statement.

This type of financing would have been unthinkable just a few months ago, after Western governments imposed sanctions on Harare in 2001 over allegations of vote-rigging and human rights abuses. However, most of the sanctions have been recently lifted, though those on Mugabe and his family remain.